Tourism Holdings expects lower first half

By Phil Boeyen, ShareChat Business News Editor

Tuesday 13th November 2001

Tourism Holdings (NZSE: THL) says first quarter earnings are marginally behind last year and it is picking interim profit to the end of December will also lag the previous result.

Chairman Keith Smith told shareholders at the company's AGM on Tuesday that while the New Zealand operations for the three months ended September were generally in line with last year, THL Rentals, Treble Cone and Aviation were down due to a shorter and lower yield ski season.

He says the Australian Rentals operations have enjoyed a solid quarter but the company overall is looking at a lower half-year result, based on current booking levels.

The cautious outlook contrasts with the company's view prior to the September 11 attacks.

"Up until the week beginning September 11 the outlook for the new financial year for THL was extremely positive," says Mr Smith. "However, worldwide events and the Ansett Australia receivership have had a detrimental affect on tourism in the South Pacific."

Mr Smith says the company is monitoring the situation with the industry task forces in New Zealand and Australia to ensure that it can ride out the tourism crisis and also capitalise on the recovery when it occurs.

"It is anticipated that New Zealand and Australia will benefit from the upturn as international tourists, particularly Americans, will be looking for a secure and safe environment to travel to as well as a welcoming destination."

In response to the downturn THL reports it has been keeping a close eye on its cash position and has moved to defer capital expenditure, drive revenue growth orientated to the New Zealand and Australian domestic markets and trans Tasman business, as well as eliminating all non essential expenditure and strengthening cash management controls.

The company says the previously announced integration of its coaching operations within the Experiences division has gone extremely well and the sale of older coaches is ahead of plan. 17 coaches have been sold in the past four months the further disposal of coaches is now being brought forward due to the likely downturn in tourism numbers.

Sales of surplus motor homes in Australia are also going well with the company selling 191 units in the first four months of this year, 153 ahead of the same period last year. The lack of sales last year weighed heavily on the company's final result.

"We are advancing the disposal programme beyond plan because of the possible downturn in bookings in the New Year," says Mr Smith.

THL says in the last 12 months the number of shareholders in the company has increased by 40% to over 8,100, mostly New Zealand investors.

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